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SNU
SNU
SNU - Sentula Mining - Debt reschedule and capital raising
Sentula Mining Limited
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: SNU ISIN: ZAE000107223
("Sentula" or "the Group" or "the Company")
DEBT RESCHEDULE AND CAPITAL RAISING
Shareholders are referred to the announcement released on SENS on Thursday, 13
August 2009, in which shareholders were advised that the Company was
renegotiating the restructure of the Company`s senior debt facility of
approximately R1.6 billion with its consortium of financiers ("the Consortium").
The Company and the Consortium have now signed a revised loan agreement
governing the terms of the restructured debt. Following the breach of the debt
service cover ratio ("DSCR") in December 2008 and in anticipation of a
recapitalisation of the Company, a renegotiation of the Company`s senior debt on
more commercially attractive terms and conditions was required. The rescheduled
debt terms and conditions are only applicable if the outstanding balance of the
debt is reduced by an amount of R400 million by 30 November 2009 ("the
Recapitalisation").
The principle terms of the Consortium debt pre and post Recapitalisation are
detailed hereunder:
Pre Recapitalisation Post Recapitalisation
Interest Rate: JIBAR plus 5.19% JIBAR plus 4%
Default Interest 5% in excess of 3% in excess of
Rate: Interest Rate Interest Rate
Term of facility: 32 Months 38 Months
Debt Service Cover 1.25 times 1.1 times
Ratio:
Structuring Fee: 2% 2%
Additional Fee*: 3% of outstanding not applicable
debt
Additional Margin: 2%-3% not applicable
The Additional Fee* of 3% (R48 million) of the outstanding balance of the debt
is only payable should the Recapitalisation not have taken place by 30 November
2009. This fee is in addition to the 2% Structuring Fee (R32 million) payable to
the Consortium for the debt restructure.
In the event that a Recapitalisation does not occur, an Additional Margin of 2%-
3% may be levied, in addition to the margin of 5.19%, for the periods that
financial performance deviates by more than 10%-15% from budgeted levels. The
Consortium may under these circumstances also compel Sentula into a forced sale
of its assets should this underperformance continue for certain periods. These
provisions apply notwithstanding that the company may be in full compliance with
its financial covenants.
Following a Recapitalisation:
- the restrictions pertaining to the Company`s ability to transact with its
asset portfolio will be lifted, to the extent that the Consortiums` security
is not impinged;
- distributions to shareholders are permitted subject to covenant compliance;
and
- no prepayment penalty will apply in the case of refinancing.
Other benefits that are anticipated as a result of the Recapitalisation and debt
restructure include:
- improved debt to equity ratios, in line with the Group`s target capital
structure of debt to equity ratio of 40% to 50%;
- reduced risk of breaching covenants and improved operational cash flows;
- reduced risk of the resultant imposition of restrictive conditions and / or
the potential forced sale of assets; and
- the ability of the Company to better position itself for competitive
refinancing of the senior facility in the medium term.
The minimum free cash flow required to meet the DSCR pre and post capitalisation
are detailed hereunder.
Financial year ending Pre-recapitalisation Post-recapitalisation
(R`million) (R`million)
31 March 2010 717 475
31 March 2011 929 550
31 March 2012 910 534
31 March 2013 147 339
In order to achieve the debt restructure, the board of directors of Sentula
resolved to pursue a rights offer of approximately R500 million, which rights
offer is in the process of being finalised and the terms and conditions of which
will be announced shortly.
Johannesburg
6 October 2009
Sponsor:
Merchantec (Proprietary) Limited
Corporate adviser:
Investec Bank Limited
Legal adviser:
Werksmans Inc.
Date: 06/10/2009 11:30:46 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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